The volume of real estate transactions on the commercial real estate market in Croatia in 2018 was €810 million, twice as much as in 2017, showed the latest analysis by the Croatian office of Colliers International, presented on Thursday.
The increase in real estate transactions is the result of a positive investor sentiment and attractive returns, and this year a similar investment volume is expected, mostly in the tourism sector and on the office space market, showed the analysis.
Colliers International, with headquarters in Canada, is a global real estate services and investment management organisation with offices in 69 countries.
This year, apart from expected investments in tourism and office space, new investments are also expected in the sector of commercial real estate, currently the least developed in the country – industrial and logistics real estate, said Colliers Croatia director, Vedrana Likan.
In 2018, demand was greatest in category A office space, as well as office space bigger than 500 square metres, while the average rent price for such a space ranged between €12 and €13 per square metre (not including VAT).
Investments highest in tourism, lack of greenfield investments
The tourism sector, specifically hotels and shopping centres, accounted for the largest portion of real estate transactions in 2018, of 42 percent and 47 percent (or €336 million and €378 million) respectively.
Likan said that there was a chronic lack of greenfield investments and that they were what the country’s image as an investment destination depended on. She said that she expected office space and buildings to exceed the retail sector (shopping malls) in terms of the market share this year.
Investments from China, Middle East growing
As regards the origin of investment capital, in 2018 most of it came from South Africa, accounting for 39.7 percent of the total volume of investments.
Croatian capital accounted for 39.6 percent of the real estate transactions.
“In 2019 we expect a slowing down of investments from South Africa because after Croatia and Serbia and Southeast Europe in general, as early as 2018 they focused strongly on Central Europe, notably Romania, followed by Poland and Hungary… On the other hand, a Chinese investor arrived in Croatia with the Peljesac Bridge project, which sets a precedent on the Croatian market even though the Chinese are already present in neighbouring countries – Bosnia and Herzegovina, Serbia and elsewhere,” Likan said, adding that this project would pave the way for more Chinese investments in Croatia.
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